by John Nichols, CFP®
Almost two years ago my wife and I had our first child, a beautiful daughter named Ella. Being nervous first time parents, we wanted to make sure we had everything necessary for Ella’s arrival and luckily for us, numerous websites give a checklist of “must have” baby items. Although I assumed we needed things like a crib, rocker, and bottles, there were an additional 400 (give or take) items that I was not prepared to buy. But as much as I complained to my wife at first, I must admit that as the last two years have passed, I have found that most of the products we bought have been useful if not life saving!
Besides the checklist for Baby’s R Us and Target, there are also important financial details that all new parents should include on their to-do-lists. First, and most importantly, all new parents should have Wills in place. A Will not only specifies the flow of your assets upon your death, but also spells out who will be the legal guardian of your children, should you pass away before they reach the age of legal majority. It is also important to make sure you have sufficient life insurance coverage. If a parent passes away when their children are still relatively young, having adequate life insurance coverage can be necessary to provide replacement of lost income, cover costs of additional childcare, and also help to pay for college.
Any life changing event can also be a good time to review all of the beneficiary designations that are in place for your various retirement accounts, be they work 401(k) plans, or IRA accounts. We often find that young couples still have parents or siblings listed as beneficiaries on their accounts, when it may make the most sense to list your spouse and/or trusts for your children as beneficiaries. Finally, if you would like to help cover a portion or all of your children’s college education, setting up a 529 college savings plan is a must.
Whether you are a new parent or have older children, making sure you take care of these to-do items is essential. Luckily, a majority of these can be handled with relative ease. If you have any questions or would like to get started crossing off these to-do list items, feel free to contact me at 412-630-6000 or email me at firstname.lastname@example.org